Corruption Perceptions Index

This article needs to be updated. Please update this article to reflect recent events or newly available information.(February 2018)

Corruption Perceptions Index, 2017

The Corruption Perceptions Index (CPI) is an index published annually by Transparency International since 1995 which ranks countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys."[1] The CPI generally defines corruption as "the misuse of public power for private benefit".[2]

The CPI currently ranks 176 countries "on a scale from 100 (very clean) to 0 (highly corrupt)". Denmark and New Zealand are perceived as the least corrupt countries in the world, ranking consistently high among international financial transparency, while the most perceived corrupt country in the world is Somalia, ranking at 9 out of 100 since 2017.[3]

Transparency International commissioned the University of Passau's Johann Graf Lambsdorff to produce the CPI.[4]
The 2012 CPI takes into account 16 different surveys and assessments from 12 different institutions.[5] The 13 surveys/assessments are either business people opinion surveys or performance assessments from a group of analysts.[2] Early CPIs used public opinion surveys.[6] The institutions are:

A study published in 2002 found a "very strong significant correlation" between the Corruption Perceptions Index and two other proxies for corruption: black market activity and overabundance of regulation.

All three metrics also had a highly significant correlation with real gross domestic product per capita (RGDP/Cap); the Corruption Perceptions Index correlation with RGDP/Cap was the strongest, explaining over three fourths of the variance.[9] (Note that a lower index on this scale reflects greater corruption, so that countries with higher RGDPs generally had less corruption.)

Research papers published in 2007 and 2008 examined the economic consequences of corruption perception, as defined by the CPI. The researchers found a correlation between a higher CPI and higher long-term economic growth,[10] as well as an increase in GDP growth of 1.7% for every unit increase in a country's CPI score.[11] Also shown was a power-law dependence linking higher CPI score to higher rates of foreign investment in a country.

Because corruption is willfully hidden, it is impossible to measure directly; instead, proxies for corruption are used. Seligson states that corruption is a very "difficult phenomenon to measure", there have been many attempts to solve this problem but they've all come up with limitations.[21]

According to political scientist Dan Hough, three flaws in the Index include:[23]

Corruption is too complex to be captured by a single score. The nature of corruption in rural Kansas will, for instance, be different from that in the city administration of New York, yet the Index measures them in the same way.

By measuring perceptions of corruption, as opposed to corruption itself, the Index may simply be reinforcing stereotypes and cliches.

Media outlets frequently use the raw numbers as a yardstick for government performance, without clarifying what the numbers mean. The local Transparency International chapter in Bangladesh disowned the index results after a change in methodology caused the country's scores to increase; media reported it as an "improvement".[24]

In a 2013 article in Foreign Policy, Alex Cobham suggested that CPI should be dropped for the good of Transparency International. It argues that the CPI embeds a powerful and misleading elite bias in popular perceptions of corruption, potentially contributing to a vicious cycle and at the same time incentivizing inappropriate policy responses. Cobham writes, "the index corrupts perceptions to the extent that it's hard to see a justification for its continuing publication."[25]

However, recent econometric analyses that have exploited the existence of natural experiments on the level of corruption and compared the CPI with other subjective indicators have found that, while not perfect, the CPI does appear to consistently and validly measure the magnitude of corruption across the world.[26]

In the United States, many lawyers advise international businesses to consult the CPI when attempting to measure the risk of Foreign Corrupt Practices Act violations in different nations. This practice has been criticized by the Minnesota Journal of International Law, which wrote that since the CPI may be subject to perceptual biases it therefore should not be considered by lawyers to be a measure of actual national corruption risk.[27]

Transparency International also publishes the Global Corruption Barometer, which ranks countries by corruption levels using direct surveys instead of perceived expert opinions, which has been under criticism for substantial bias from the powerful elite.[25]

Transparency International has warned that a country with a clean CPI score may still be linked to corruption internationally. For example, while Sweden had the 3rd best CPI score in 2015, one of its state-owned companies, TeliaSonera, was facing allegations of bribery in Uzbekistan.[28]